Pharmaceutical companies began the new year as they often do, raising the sticker prices on hundreds of prescription medicines.
On average, drugmakers hiked list prices by 5%, according to analysts who track the industry. That figure is in line with increases taken in the past four years, but below the national consumer inflation rate in 2022. Companies typically make the bulk of their price adjustments at the beginning of each year, although some also bump up prices in July.
Just over 1,800 drugs saw increases to their list price, or wholesale acquisition cost, since Dec. 1, 2022, about the same number that did during the same period in 2021, Elliot Wilbur, an analyst at Raymond James, wrote in a Jan. 3 note to clients.
Pfizer alone raised list prices on more than 90 of its drugs, including 8% increases for cancer treatments Ibrance and Xalkori, according to drug pricing watchdog 46Brooklyn.
Annual drug price increases have moderated from where they were in the middle of last decade, when they topped out at an average of around 9%. Growing scrutiny and criticism of the industry led to many proposals to rein in costs, including the Medicare drug price negotiation provisions that were contained in the Inflation Reduction Act enacted last year.
Still, list price increases don’t tell the whole story. Analysts can most easily track wholesale acquisition costs, which describe the price pharma companies give to wholesalers or direct purchasers, but doesn’t include the at times significant discounts and rebates insurers negotiate. Those rebates are often closely held information, making net prices for drugs harder to determine.
Manufacturers’ actual drug sales aren’t always reported accurately to the federal government, either, leading to potential overpayments by the Medicare program, according to a report released Tuesday by the U.S. Department of Health and Human Services’ inspector general’s office.
Historically, price increases have been the primary tool drugmakers have used to boost sales, Wilbur noted. But in 2022, volume accounted for more of the growth in branded drug sales than did price adjustments.
46Brooklyn’s analysis, which is derived from federal data as well as market intelligence company Elsevier, reported price increases from big drugmakers like AbbVie, AstraZeneca, Bristol Myers Squibb, GlaxoSmithKline, Pfizer, Takeda and Teva.
But none were listed for other large companies, including Eli Lilly, Novo Nordisk, Roche, Novartis or Merck & Co. Yet-to-be-disclosed price increases could result in a “large potential uptick” later this month, Wilbur wrote.
Among other notable drugs with large list price increases were the CAR-T cancer treatments Abecma and Breyanzi, the prices of which Bristol Myers raised by 9%, and COVID-19 antiviral Veklury, which Gilead hiked the price of by 10%.